If the Prepaid Rent Account Had an Unadjusted Normal Balance

question 14

Multiple Choice

If the prepaid rent account had an unadjusted normal balance of $13,400, and an adjustment was made crediting the account for $1,800, then the account would appear on the worksheet as a(n) :

• A)$11,600 debit balance in the balance sheet columns.
• B)$1,800 credit balance in the income statement columns.
• C)$11,600 credit balance in the adjusted trial balance columns.
• D)$1,800 credit balance in the balance sheet columns.

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Definitions:

Secured

Relating to a loan or obligation that is backed by collateral, ensuring the lender has recourse in case of default by the borrower.

Obligation

A legal or moral duty to do or not to do something, often resulting from a contract or promise.

Subrogation

The process by which one party assumes the legal rights of another party to collect a debt or claim.

Co-makers

Individuals or entities that jointly sign a loan or credit agreement, sharing equal liability for the repayment of the debt.